New plan brewing for Neuweiler property

Former brewery, once targeted for arena site, to be marketed to developers.

Allentown had planned to build an arena at the site of the old Neuweiler Brewery… (MORNING CALL FILE PHOTO )

October 26, 2011|By Scott Kraus, Of The Morning Call

The Allentown authority that is managing the city's downtown arena financing zone has a new plan on tap to rehab the long vacant and crumbling Neuweiler Brewery near the city's Lehigh riverfront.

But to make it happen, the Allentown Commercial and Industrial Development Authority has agreed to assume some baggage: an overdue $800,000 loan owed to Parkway Development Group Inc., an affiliate of the Brooks Group, owners of the Phantoms minor league hockey team that will play in the city's proposed downtown arena.

Last fall, when the city was planning to build the arena at the waterfront, the Brooks Group loaned the city's Redevelopment Authority $800,000 to purchase an adjacent property at 16 Liberty St. from Able Roofing, which relocated to Sumner Avenue.

When the city switched its arena plans to Seventh and Hamilton streets in March, that left the Redevelopment Authority with two vacant industrial properties and the debt.

The Redevelopment Authority, which used eminent domain to take possession of the blighted brewery in the 400 block of Front Street in 2009, will transfer ownership of both riverfront-area properties as well as two downtown sites to ACIDA, but only if ACIDA agrees to assume responsibility for repaying the $800,000 loan from Brooks Group.

ACIDA's board voted Tuesday to assume the loan and accept ownership of the Able Roofing property if Brooks will extend the due date of the loan by least 12 months.

The goal is to market the properties to developers, after cleaning up some environmental contamination. The city has hired a consultant to produce a $300,000 Lehigh River Waterfront Master Plan for the area.

Brooks Group principal Robert Brooks, who also is president of Parkway Development, said in an email that the group "is reviewing the situation" and that he expects it to be resolved "shortly."

Brooks' recourse, if the loan isn't repaid, would be to take possession of the Able Roofing property, which the city no longer needs for the arena, said C. Collins Brown, the Redevelopment Authority's solicitor.

The Redevelopment Authority borrowed the money from the Brooks Group in September 2010, Brown said. The loan was initially due on March 31, and was extended to June 30.

Because the Redevelopment Authority, which relies on the city for a substantial chunk of its budget, has little cash of its own, it could not repay the Brooks' loan, which has been accruing interest at a rate of 6 percent, or $48,000 a year.

ACIDA is looking into three possible ways of repaying the Brooks loan, Executive Director Scott Unger said. It may be able to use state Redevelopment Capital Assistance Program funds designated for the waterfront, proceeds from the eventual sale of the Able Roofing property, or money the authority borrows for the arena.

ACIDA's board has authorized borrowing up to $175 million for the arena project, and on Tuesday selected three underwriters—Citi Global Markets, Janney Montgomery Scott and Ramierez & Co. — to issue and sell bonds to fund arena construction.

Last month the authority approved a plan to use $5 million in state capital assistance to purchase the Lehigh Structural Steel property on the Lehigh River next year if its current owner fails to sell the land before then to private developer Dunn Twiggar Co., which has an option to purchase.

Unger said the city has $5 million in capital assistance money under contract with the state and another $5 million committed but not under contract, both for revitalization of the Lehigh riverfront. Gov. Tom Corbett's administration has been reviewing funds committed by former Gov. Ed Rendell to determine if they will be released.

The 5-acre tract covering the Neuweiler and Able Roofing properties is in the city's 130-acre Neighborhood Improvement Zone, which gives potential developers the ability to use their future tenants' state and local taxes to repay construction loans.

The zone covers most of the properties along Hamilton Street from Fifth to Ninth streets and multiple properties on and near the Lehigh riverfront. To make the two riverfront properties more attractive, ACIDA voted Tuesday to accept a $600,000 loan from the city, from a federal Environmental Protection Agency loan fund, to clean up the Neuweiler property.

"This first step of remediation and cleanup is necessary for the future hopes of redevelopment of that property," Unger said.

The city and authority hope that by assuming ownership and packaging the two properties, cleaning them up at least partially, and including them in the improvement zone, they will be able to entice a developer.

"It is very challenging to redevelop either property without the other," Unger said.

The city and Lehigh Valley Land Recycling Initiative will chip in $25,000 each to fund a historic reuse study of the Neuweiler property, Unger said.

The brewery opened in 1913 under the management of Louis Neuweiler and his sons, who moved to Allentown from Philadelphia. During Prohibition, it switched to making soda and survived until closing in 1968. In 1980, it was added to the National Register of Historic Places.